Bern, 31 January 2024
The Federal Council adopted further sanctions against Russia at its meeting on 31 January. This is in response to Russia’s ongoing military aggression against Ukraine. In doing so, the Federal Council joins the European Union (EU), which adopted its 12th package of sanctions in December 2023. The new measures will enter into force on 1 February. Switzerland previously added 147 individuals and entities to its sanctions listings on 21 December.
In response to Russia’s continued acts of destabilisation undermining the territorial integrity, sovereignty and security of Ukraine, the EU adopted its 12th package of sanctions against Russia on 18 December 2023. This package aims to tighten the implementation and enforcement of existing sanctions and to combat and prevent their circumvention. A number of new sanctions were also introduced.
The Federal Department of Economic Affairs, Education and Research (EAER) followed suit on 22 December by expanding the Swiss sanctions lists under its jurisdiction to include a further 147 individuals and entities. Switzerland has thus placed a total of 1,422 individuals and 291 organisations and entities under sanction since the beginning of Russia’s military aggression against Ukraine. On 31 January, the Federal Council adopted the remaining measures of the EU’s 12th sanctions package that are relevant to Switzerland with the aim of increasing their impact.
Ban on Russian diamonds and additional trade controls on goods
Among the new measures is a phased ban on the purchase and import of Russian diamonds. Switzerland thus joins the measures agreed at the G7 summit on 6 December 2023 to deprive Russia of this important revenue stream. The authorities responsible for implementing these measures in Switzerland will work with the relevant sectors to ensure that the new restrictions are coordinated internationally and implemented efficiently.
Import bans are being introduced on certain goods that generate significant revenue for the Russian state. For example, the purchase and import of pig iron and LPG (liquified petroleum gas) from Russia is prohibited. The lists of prohibited goods that could strengthen Russia’s military and technology capabilities or goods which could enhance Russia’s industrial sector are also being expanded. These new measures prohibit the export and sale to Russia of chemicals, lithium batteries, certain motors for unmanned aerial vehicles, as well as machine tools and machinery parts. Furthermore, more entities have been added to the list of companies subject to restrictions on goods for civil and military use (dual-use goods).
Measures in the financial and services sectors
In the financial sector, Russian nationals and individuals living in Russia will be banned from controlling companies in Switzerland that provide crypto-asset services. There are also additional measures to support enforcement of the oil price cap for Russian crude oil and petroleum products and to counteract attempts to circumvent the cap. Market participants are now required to exchange itemised price information with each other and with the competent authorities on request. New reporting and authorisation requirements will be introduced to monitor the sale of tankers that may be used to circumvent the oil price cap.
In the services sector, there is now a ban on providing software for the management of enterprises and software for industrial design and manufacture to Russian companies. The Federal Council has made exceptions for the provision of services to Russian subsidiaries of Swiss companies.
Further measures to be examined in detail
The EU’s 12th sanctions package also includes a notification requirement for the transfer of funds out of the EU from EU-based companies controlled by Russians or by individuals or entities established in Russia. For the time being, the Federal Council has decided not to introduce this requirement. Instead, it has instructed the EAER, working with the Federal Department of Finance, to examine whether a notification requirement should be implemented in Switzerland and how it could be structured. In particular, they will examine how a notification requirement for transfers to third countries could generate the greatest possible benefit for the effective implementation of sanctions in Switzerland.
Source – Swiss Government